Beazer Shuts Down Mortgage Subsidiary

Beazer Homes USA, Atlanta, is discontinuing the origination of mortgages through its troubled Beazer Mortgage Corp subsidiary. As a result, it has ended its mortgage services relationship with Homebuilders Financial Network LLC. Instead, the company has entered into an agreement with Countrywide Financial Corp., Calabasas, Calif., under which the latter will be marketed to Beazer homebuyers as the company's preferred mortgage lender. "Given the increasing complexities in mortgage financing today, we believe working with an established leader in mortgage lending makes the most sense for our homebuyers and our business," said Beazer president and chief executive Ian McCarthy. An investigation by the audit committee of Beazer's board of directors found evidence that employees of Beazer Mortgage violated Department of Housing and Urban Development regulations, particularly in relation to downpayment assistance programs, in certain Federal Housing Administration-insured loans dating back to at least 2000. Beazer Homes also said it is exiting the homebuilding business in Charlotte, N.C.; Cincinnati/Dayton, Ohio; Columbia, S.C.; Columbus, Ohio; and Lexington, Ky. Beazer can be found on the Web at http://www.beazer.com.

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